Oil prices up as traders foresee tighter supplies

BANGKOK — Oil prices rose Wednesday as analysts predicted a strain on supplies and Middle East tensions would support crude prices.

Benchmark crude for October delivery rose 3 cents at late afternoon Bangkok time to $96.87 per barrel in electronic trading on the New York Mercantile Exchange. The contract finished 71 cents higher at $96.68 in New York on Tuesday.

Traders also awaited the release of minutes from the Federal Reserve’s previous policy meeting for signs that it might lower interest rates. Lower rates tend to drive oil prices because they steer investors away from less-risky investments.

Analysts at Goldman Sachs, meanwhile, said tightening supplies and oil-producing Iran’s standoff with the West over its nuclear program were factors to be considered in the direction of oil prices.

“In our view, it is only a matter of time before inventories and OPEC spare capacity become effectively exhausted, requiring higher oil prices to restrain demand, keeping it in line with available supply. Further, as tensions between Iran and the West escalate, the risk to crude oil prices is becoming increasingly skewed to the upside,” the analysts said in an email commentary.

Brent crude, which is used to price international varieties of oil, fell 35 cents to $114.29 per barrel on the ICE Futures exchange in London.

In other futures trading on the Nymex, heating oil was down 0.3 cents to $3.128 a gallon. Natural gas was 3 cents higher $2.809 per 1,000 cubic feet.